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MSE News: Funding for Lending scheme fails to boost mortgages

Former_MSE_Helen Posts: 2,382 Forumite
edited 3 June 2013 at 4:36PM in Loans
"Banks and building societies participating in the FLS shrunk net lending by £300 million in the first quarter the year..."
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Funding for Lending scheme fails to boost mortgages


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  • opinions4u
    opinions4u Posts: 19,411 Forumite
    MSE says:

    Bank of England says:
    The Bank of England hasn't split out lending to home buyers and businesses. It says since 2012 lending flows to individuals have been "typically positive", while lending to businesses has "mostly been negative".
    It adds there is also evidence that rates on mortgages, unsecured personal loans, and loans to businesses have fallen since the FLS began.

    So mortgage lending to individuals has increased and the cost of new mortgage loans has fallen.

    Loan balances owed by businesses were bound to fall. Of course net lending has shrunk. It was always going to shrink.

    Banks have stopped lending to some business segments (where they should never really have been lending in the first place) and are winding down these assets. The debts are being repaid or written off.

    It doesn't mean that FLS isn't doing what it's intended to do though. Just look at the cheaper mortgage market to see the impact.

    Again, big headline, poor detail. Well done.
  • bigadaj
    bigadaj Posts: 11,531 Forumite
    Name Dropper First Post First Anniversary
    Also in wrong forum?
  • rb10
    rb10 Posts: 6,334 Forumite
    No mention of the fact that Nationwide and Barclays have each increased lending by over £1bn ... is this not relatively significant?

    It's pretty clear that FLS has been a massive boost to mortgage lending.
  • orlandof
    Government funding is a benefit for bankers. Cheap money warps the market, so savings rates are on the floor. The true course of economy is turned topsy turvy: the profligate rewarded, the careful punished. This is immoral.
  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
    Name Dropper First Post First Anniversary
    I disagree - the problem is that much of the cheap lending has gone on the buy to let market - rents are high meaning people have to pay rent AND try to save enough for a deposit to buy their own place.
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